County Economic Status and Distressed Areas in the Appalachian Region

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1 County Economic Status and Distressed Areas in the Appalachian Region Kostas Skordas, Director Regional Planning & Research Division Appalachian Regional Commission Washington, DC

2 Appalachian Regional Commission In 1965, Congress established the Appalachian Regional Commission (ARC) to address the profound economic and social problems that made Appalachia a region apart from the rest of the nation. The Appalachian Regional Development Act established a mandate to focus resources on reducing the socioeconomic gap between the Appalachian Region and the nation. 2

ARC Mission and Goals Innovate, partner, and

3 ARC Mission and Goals Innovate, partner, and invest to build community capacity and strengthen economic growth in Appalachia 1. Economic Opportunities 2. Ready Workforce 3. Critical Infrastructure 4. Natural and Cultural Assets 5. Leadership and Community Capacity 3

4 Appalachian Region 13 states 420 counties 205,000 sq. miles 25 million people 73 local development districts 4

5 Purpose of Economic Index To target special resources to the most economically distressed counties and areas in the Appalachian Region. To measure the progress of ARC s overall vision of helping Appalachia achieve socioeconomic parity with the nation. 5

6 Targeting Index: Process ARC uses an index-based county economic classification system to identify and monitor the economic status of 420 Appalachian counties. The system compares each county's averages for three economic indicators three-year average unemployment rate, per capita market income, and poverty rate with national averages. The resulting values are summed and averaged to create a composite index value for each county. Each county in the nation is then ranked, based on its composite index value. Counties are designated as distressed, at-risk, transitional, competitive, or attainment, based on their ranking in the index. Designations are revised annually using the most current data available. 6

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8 County Economic Status, Fiscal Year 2016 Distressed (93) At-Risk (110) Transitional (205) Competitive (11) Attainment (1) 8

9 Economic Indicators Three Year Average Unemployment Rate U.S. Department of Labor, Bureau of Labor Statistics, Local Area Unemployment Statistics Average smooths out sudden economic shifts Per Capita Market Income U.S. Department of Commerce, Bureau of Economic Analysis, Local Area Personal Income Excludes gov t transfer payments to focus on earned income Is inversed so that low incomes have high (bad) index values Poverty Rate U.S. Department of Commerce, Census Bureau, American Community Survey 5-Year Estimates Switched to ACS data in 2012, 5-Year data needed for small counties 9

10 Data Time Series (updated annually) 10

11 Methodology Compare the three economic indicators for each county to the national average Average the three results into a composite index value Rank the index values from high (worst) to low (best) Designate economic status based on position in the national rank 11

12 Methodology Distressed counties are the most economically depressed counties. They rank in the worst 10 percent of the nation's counties. At-Risk counties are those at risk of becoming economically distressed. They rank between the worst 10 percent and 25 percent of the nation's counties. Transitional counties are those transitioning between strong and weak economies. They make up the largest economic status designation. Transitional counties rank between the worst 25 percent and the best 25 percent of the nation's counties. Competitive counties are those that are able to compete in the national economy but are not in the highest 10 percent of the nation's counties. They rank between the best 10 percent and 25 percent of the nation's counties. Attainment counties are the economically strongest counties. They rank in the best 10 percent of the nation's counties. 12

13 Designation by National Index Value Rank County Economic Status Designation by National Index Value Rank 13

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16 Measuring Progress: National Parity One way to measure progress is to look at the economic status of Appalachian counties in comparison with all counties nationwide. In addition to the five economic status designations, ARC groups the ranked index values into four quartiles with an approximately equal number of counties in each group. ARC can compute annually the number of Appalachian counties in each quartile, as well as an overall regional index value. This can be directly compared with the national index value to measure progress. In addition, progress can be clearly measured by reductions in the number of Appalachian counties in the worst quartile. Despite a large reduction in the number of distressed counties in Appalachia over the past several years, the Region continues to have a disproportionately high number of counties with underperforming economies and a smaller share of counties with strong economies, compared with the rest of the nation. 16

17 National Parity: Counties per Quartile 17

18 Distressed Areas Designation ARC recognizes that some areas in non-distressed counties have substantially higher poverty or lower income levels than national averages and should be considered economically distressed. These areas should be an important focus of Commission assistance. ARC designates as "distressed areas," those census tracts in at-risk and transitional counties that have a median family income no greater than 67 percent of the U.S. average and a poverty rate 150 percent of the U.S. average or greater. Designations are revised annually using the latest fiveyear estimates from the American Community Survey. 18

19 Data Time Series (updated annually) 19

20 Distressed Areas 20

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23 Purpose of Economic Index To target special resources to the most economically distressed counties and areas in the Appalachian Region. To measure the progress of ARC s overall vision of helping Appalachia achieve socioeconomic parity with the nation. 23

24 County Economic Status and Distressed Areas in the Appalachian Region Thank you for your time! Questions? 24

EDA Redevelopment Area Analysis. Lawrence Wood Amy Glasmeier Fall 2003 One Nation, Pulling Apart

EDA Redevelopment Area Analysis Lawrence Wood Amy Glasmeier Fall 2003 One Nation, Pulling Apart I. Introduction In accordance with the Area Redevelopment Act (Public Law 87-27), in 1965 the EDA designated